Buying Bank Owned Homes in Phoenix is Like Driving the Lane in the NBA Playoffs: Come Strong, or Don’t Come at All

Such as the mantra of the meeting I just attended to discuss pricing bank owned homes in the Phoenix real estate market. My brokerage, RE/MAX Desert Showcase, recently entered the REO listings market and there’s been enough work that it’s now spilling out to the agents pool and not just the broker/owners who landed the initial contract.

The goal? Get these homes under contract and fast – 10 days or less fast, to be specific.

The method? Price the homes aggressively from the beginning. Not ridiculously low, but competitive in comparison to other homes on the market currently and recently sold.

Truthfully it’s not much different than what we try and do on all of our listings, though there is one significant difference – banks don’t have emotions that interfere with the cold logic of the current market. Banks don’t insist their home is better than the neighboring home or that they “know what the house is worth” when that knowledge doesn’t match up with the cold, hard statistics.

I know I’m going to hear from loyal reader Frank on this one. And I swear, I have no shortage of empathy for sellers who are trying to sell in this market when it’s not an absolute must. (My advice in those situations – don’t sell.) It’s just where this market is.

Buyers – Take Your Best Shot

The flip side of aggressive pricing is it creates higher demand for a property. And with higher demand comes higher priced offers and higher sales prices.

Many of my Canadian buyers have been told by friends that you can buy any house you choose here in the Valley for 50 cents on the dollar. Not so.

In fact, if you’re looking at a bank owned property, you likely will not be the only buyer writing an offer for the home. Multiple offers often lead to sales prices at or above the current list price (but still often at or below current market value.)

If the expectation is to come to Arizona to lowball the banks, you’re more than likely not going to end up purchasing a home for the simple reason that the banks are lowballing themselves when they price the house, at least in most cases.

Lowballing works if you’re the only player in the game. But you’re not going to be.

The market for bank owned homes is a sellers’ market, at least from the perspective of demand. If you’re serious about buying, you need to adjust your strategy accordingly.